Castrol India’s net profit fell 23% to ₹176.37 crore as raw material costs surged 70.8%, even as revenue rose 27.3%. Investors are also tracking the mandatory open offer at ₹194.04 per share following BP’s $10 billion global sale of the lubricants arm to Stonepeak. This combination of margin pressure and the upcoming change in ownership creates a period of uncertainty for the company.
Castrol India saw its net profit decline to ₹176.37 crore for the quarter ended September 2026, marking a 23% drop compared to the ₹227.80 crore reported in the same quarter last year. Despite this decline in profitability, the company recorded a 27.3% increase in revenue, which climbed to ₹1,734.72 crore. The bottom line was primarily affected by a significant surge in input expenses, with raw and packing material costs jumping by 70.8%.
Operational Margins Under Pressure
The lubricants industry relies heavily on base oil prices, which have remained volatile. These raw material expenses now represent 62.6% of the company's total revenue, a sharp increase from the 46.7% share recorded in the corresponding period of the previous year. As a result of these higher costs, the company's EBITDA margin fell by 860 basis points to 15.1%. Management had previously warned that the exhaustion of lower-cost inventory would lead to margin compression, and these results confirm that trend. Additionally, currency fluctuations and broader inflationary pressures continued to create challenges for the company during the quarter.
Ownership Transition and Open Offer
These financial results are accompanied by a major shift in the company’s corporate structure. Parent entity BP is in the process of selling its global Castrol lubricants business to the investment firm Stonepeak in a transaction valued at approximately $10 billion. Because Stonepeak will gain indirect control over the Indian business, it has triggered a mandatory open offer. Shareholders are being offered an initial price of ₹194.04 per share to acquire up to 26% of the company's equity.
While the company continues to maintain a strong presence through its network of over 1.67 lakh outlets across India, the transition period introduces a layer of uncertainty. Investors will likely track the progress of regulatory approvals for the Stonepeak deal and the outcome of the open offer. Furthermore, the company’s ability to stabilize its operating margins while navigating raw material cost volatility and competitive pressures remains a critical area for shareholders to monitor in upcoming quarters.